Truck producers in Europe sentenced to pay record fine for price collusion
Tuesday, 19 July 2016
The European Commission has found that five major truck producers have broken EU anti-trust rules by participating in a cartel. After a lengthy investigation which started in January 2011, the Commission imposed on Tuesday (19 July) a total fine of € 2.9 billion on MAN, Volvo/Renault, Daimler, Iveco, and DAF for collusion on truck pricing and on passing on the costs of compliance with stricter emission rules to customers.
When determining the record fine, the Commission took into account the global turnover of the companies, the long duration of the cartel and the wide market area affected – in fact all EU member states.
The decision relates specifically to the market for the manufacturing of medium (weighing between 6 to 16 tons) and heavy trucks (weighing over 16 tons). The five truck producers account for about 90 % of medium and heavy trucks produced in Europe.
Commissioner Margrethe Vestager said at a press conference in Brussels on Tuesday that there are over 30 million trucks on European road. They account for around three quarters of inland transport of goods in Europe and play a vital role for the European economy.
MAN which belongs to the Volkswagen group was not fined because it had revealed the existence of the cartel to the Commission, thereby avoiding paying a fine of over € 1.2 billion. All companies acknowledged their involvement and agreed to settle the case in return for a reduction of the fine.
It is not clear whether an employee of MAN blew the whistle or the company changed its mind. Asked by The Brussels Times, Commissioner Vestager said that it was difficult to discover the cartel because it was secret and led by senior management.
“It pays off to denounce a cartel, to put an end to your participation and to cooperate with the Commission if you find out that your company is involved in similar wrongdoing,” she commented. “Although of course, best of all is simply not to participate in a cartel!”
According to earlier news report, the companies concerned have already put aside money for the fines. The truck producers now have 3 months to pay the fine. It will go into the EU budget and reduce the contributions due from EU countries for membership in the EU.
A sixth European truck producer, the Sweden-based Scania, was also part of the investigation but rejected a settlement with the Commission. The investigation regarding this company – which according to news report has not set aside any money for a possible fine – will continue.
“It’s not acceptable that the truck producers were part of a cartel instead of competing with each other, “ Commissioner Vestager said. “For 14 years they colluded on the pricing and on passing on the costs for meeting environmental standards to customers. This is also a clear message to companies that cartels are not accepted.”
The cartel covered the entire European Economic Area and lasted from 1997 until 2011 when the Commission carried out unannounced inspections of the firms.
“Our investigation showed that a meeting in Brussels at a ´cosy hotel´ was the starting point of this long lasting trucks cartel. The first meeting between senior managers of the trucks producers fined today was organised right here in January 1997,” the Commissioner said.
Vestager declined to specify what she meant by “senior managers” but it appears that the cartel was known to the top management of the companies.
A calculation on how much customers overpaid for trucks is difficult to make. However, any person or firm affected by anti-competitive behaviour as described in the case may bring the matter before the courts of the Member States and seek damages. The Commission decision constitutes binding proof that the behaviour took place and was illegal.
Even though the Commission has fined the companies concerned, damages may be awarded without being reduced on account of the Commission fine.